July Busy Month For Sam's Club

July 17, 2014

Sam's Club opened three new locations this month including locations near Chicago, Fort Worth and Wichita, Kansas, that pushed its club count to 630 units.

The Wichita location at 3084 N. Maize Road opened on July 17 and provided Sam's with an opportunity to remind current and prospective members of its value proposition.  For example, Sam's noted that it recently became the first U.S. retailer to actively implement chip-enabled credit card reader technology in its clubs and also recently introduced a new credit card which has an embedded chip designed to protect cardholders from fraud.  The new card also features a cash back program giving members the opportunity to earn cash back on all purchases, up to $5,000 per year.

The Wichita location featured Sam's now familiar trio of health services that includes a pharmacy, optical and hearing aid centers.  To expose residents to those services, Sam's provided a wide range of free screenings on opening day and the weekend of July 18-19.

Earlier in the month, Sam's Club opened locations in Montgomery, Illinois, a far western suburb of Chicago and Burleson, Texas, a half hour due south of Fort Worth.  The location in Montgomery, at 1050 Ogden Avenue, also featured health care screenings, and a bit of grand pening novelty.  The club offered members the opportunity to experience Marvel 3D printing and create miniature versions of themselves with their faces on the bodies of Marvel superheroes.

The 3D capability brought a bit of "wow" factor to the opening as did some big name Chicago sports stores.  Former Bears defensive tackles Dan Hampton and Anthony Adams were on hand along with former Blackhawks coach Denis Savard.

The location near Fort Worth in Burleson at 600 N. Burleson Boulevard also featured the Marvel 3D experience and former Dallas Cowboys great Charles Haley was on hand for autograph signings.

Source: Retailing Today

Retailers Right-Sizing Amid 2014 Uncertainty

January 27, 2014

Revelations of job cuts at leading retailers, the latest involving Sam's Club, are a reminder that pro-active expense control remains retailers' best friend when it comes to ensuring profitability when faced with a murky outlook for consumer spending.

Sam's Club on Friday became the latest retailer to disclose plans to eliminate 2,300 hourly and middle management positions.  The move was characterized as a rebalancing of resources, according to Sam's Club spokesman Bill Durling.  Other retailers such as Macy's and Target also recently announced job cuts.

"In order to position ourselves for future growth, Sam's Club has made the difficult decision to implement a job reduction in our field organization impacting approximately 2,300 associates, or approximately 2% of associate population," Durling said.  We're doing this to rebalance our resources more effectively across our clubs to align our structure more closely to the current and future revenue of each club.  We are eliminating certain hourly positions, in some cases reducing the number of assistant managers, and in some cases creating new, more senior level positions."

Sam's operates roughly 630 clubs throughout the U.S., so the cuts equate to about four people per club.  However, in all likelihood few people will be left without work or a paycheck.  Sam's is giving affected employees their regular salary for two months and the opportunity to apply for other positions at Sam's or Walmart.  Those unable to secure a new position will be given an undisclosed severance package.

The net effect on Sam's overall workforce is likely to be minimal as well since the warehouse club operator has fairly ambitious growth plans in place for 2014 that will result in new hires.  The day before the job cut announcement, Sam's opened two new clubs in Warwick, R.I. and Moorsesville, N.C., which resulted in the hiring of roughly 300 employees.  During the new fiscal year which begins February 1, Sam's plans to open between 17 to 22 new clubs, inclusive of relocations and expansions, which could result in the hiring of between 2,000 and 3,000 employees based of similar staffing levels.

The job cut announcement by Sam's Club and other retailers tended to garner some sensational headlines, but in reality retailers tend to focus on right-sizing their field and store level operating structures early in the year based on sales expectations and customer service priorities for the coming year.  In fact, it is somewhat surprising given the emphasis on efficiency that prevails in the warehouse club environment that Sam's had not already taken action to more closely align labor with sales.

As for Macy's, the 2,500 job cuts it announced several weeks earlier also will have a minimal impact since many of those affected will be able to secure positions elsewhere in the company.  Overall, Macy's doesn't expect the cuts to reduce its total workforce because of gains elsewhere.

A similar situation exists at Target where plans to cut 475 jobs at its home office and leave another 700 positions unfilled are likely to prove temporary.  Putting aside the nightmare the company is facing regarding its data breadh, Target continues to have ambitious growth plans that it will eventually require adequate staffing levels to execute.

Source: Retailing Today